May 2015

The World’s Coming Broadband Divide

Several recent events pointed out how much business success, economic development and even international competition is starting to depend on once unimaginably fast Internet speeds:

  1. Charter Communications announced that it would spend, in two separate deals, a combined $67.1 billion to buy Bright House Networks and Time Warner Cable. A big reason for the deal was the opportunity to offer faster online services.
  2. The Federal Communications Commission circulated a plan to include broadband in a $1.7 billion program that subsidizes landline and mobile phone services to 12 million low-income households in the United States.
  3. Mary Meeker said that 34 percent of the work force in the United States, 53 million people, now consider themselves independent contractors, short-term hires or other kinds of freelancers. Of these, she said, two-thirds believe that the Internet makes it easier for them to find work, and 41 percent have done online projects.
  4. Cisco Systems released its annual projections of Internet traffic over the next five years. Average speeds for standard landline networks, 21.8 mps in both North America and in Western Europe in 2014, will increase to over 40 mps in 2019, Cisco said. A big reason for the increase will be video.

The uneven global upgrades are not just a question of wealth. Eastern Europe already has wired speeds like its more-developed neighbors, and is projected to have the world’s fastest Wi-Fi and mobile networks. China’s fixed broadband speeds are expected to be faster than those in Spain, and just less than in Britain. And where that broadband gets upgraded, expect economic opportunity to follow.

Cashing In on a Charter-Time Warner Cable Merger

Whatever cable customers and regulators may think of Charter Communications’ plans to acquire Time Warner Cable for $56 billion, one small group of men has reason to celebrate. Through a mix of golden parachutes, advisory fees and investment returns, a handful of cable executives, traders and bankers stand to reap enormous profits when and if the transaction closes.

Washington Bans Political Ads From Public Transit

Officials in Washington (DC) said that they had suspended all issue-oriented advertising in the public transit system because of fears that granting a request to display a cartoon of the Prophet Muhammad would make the region’s buses and trains “a target.”

The ban, which will remain in effect through the end of the year, came a month after New York officials put a similar prohibition in place. Both transit systems acted after ads were submitted by the American Freedom Defense Initiative, a pro-Israel group that has placed provocative ads critical of Islam on buses and trains across the country. The ad that the group sought to display in Washington featured a cartoon originally drawn for a contest in Garland (TX) where two gunmen were shot and killed after opening fire on the police. The image shows a cartoonist drawing a sword-brandishing Muhammad who says, “You can’t draw me!” “That’s why I draw you,” the cartoonist responds. The words “support free speech” are written in red block letters at the top of the ad.

Irish Media, Fearing Lawsuits, Steers Clear of a Billionaire

When the financial crash hit in 2008, it plunged Ireland into a crippling recession from which it has only recently stirred. But the toxic legacy of those years has not gone away, and now it has provoked another crisis, this time over media freedom.

A clash between one of Ireland’s richest and best-known businessmen, Denis O’Brien, and the national broadcasting company, RTE, has reopened wounds from the crash, raising questions about conflicts of interest at the top of Irish society, and about constraints on the country’s media. At stake is whether journalists should report disputed allegations about some of the past financial dealings of Mr. O’Brien, a billionaire who amassed a fortune in the cellphone sector and has extensive media interests. The issue peaked when an Irish lawmaker, Catherine Murphy, made claims in the Irish Parliament, the Dail, about relations between O’Brien and a publicly run financial institution. Such speeches are normally covered by parliamentary privilege and can therefore be published and reported on without risk of a libel suit. Not this time. While Murphy’s comments were made public on Parliament’s website, the Irish media largely avoided repeating them.

As Insults Fly in the Greek and German Media, Some Wish for Less News

The entire Greek news media is obsessed with Germany. (The German media is fascinated with Greece, too.) This is not surprising, given that Greece is staring at default on its debt and economic disaster, possibly as early as June, unless it can reach a deal with creditors — and Germany is its biggest creditor and the most immovable objector to concessions.

So every blunt utterance from Wolfgang Schäuble, Germany’s finance minister, can dominate the news, as can the typically more opaque remarks from Chancellor Angela Merkel. Even backbench German lawmakers — whose views might be ignored in their own country’s news media — can merit airtime in Greece by tossing a rhetorical grenade about the bailout. How the mutual media fascination might influence the delicate bailout negotiations is its own point of discussion. Some analysts and politicians have sharply criticized the news coverage, even as politicians or their proxies have frequently leaked information from the negotiating room, often with strategic intent.

Continuing Efforts to Measure and Report on Mobile Wireless Competition

[Commentary] The Communications Act requires the submission to Congress each year of reports analyzing the state of competition in the mobile wireless industry. The Seventeenth Mobile Wireless Competition Report was released in December 2014. On May 29, we are updating many of those charts and tables based on recently collected data relevant to competition in the mobile wireless industry. For example, we are providing information on total wireless connections by service segment; overall mobile voice and mobile broadband coverage; and provider-specific coverage. And, we have also added user-friendly interactive coverage maps. This mid-year update reflects our newly focused efforts to capture important details in the evolving mobile wireless marketplace. Among other things, the updated information shows:

  • Total wireless connections increased by 23.5 million from 2013 to 2014, with 14.7 million connections added between the 2nd and 4th quarter of 2014
  • The post-paid market continues to show noteworthy growth with 3.9 million connections added in the 4th quarter 2014
  • Quarterly net adds for connected devices almost doubled between the 4th quarter 2013 and 4th quarter 2014.

FTC Approves Final Orders In US-EU Safe Harbor Cases

After a public comment period, the Federal Trade Commission has approved final orders resolving the Commission’s complaints against TES Franchising, LLC and American International Mailing, Inc., for deceiving consumers about their participation in international privacy frameworks. The settlements were first announced in April. In its complaints, the FTC alleged that the companies’ websites indicated they were currently certified under the US-European Union Safe Harbor Framework and, in the case of TES Franchising, the US-Swiss Safe Harbor Framework, when in fact their certifications had lapsed years earlier.

In addition, the FTC alleged that TES Franchising deceived consumers about the nature of its dispute resolution policies. Under the terms of the orders, the companies are prohibited from misrepresenting the extent to which they participate in any privacy or data security program sponsored by the government or any other self-regulatory or standard-setting organization. The settlement with TES further prohibits the company from misrepresenting its participation in or the terms of any alternative dispute resolution process or service. The Commission votes to approve the final orders were 5-0.

Google Details New Project Loon Tech to Keep Its Internet Balloons Afloat

At Google's annual I/O developer conference, the company didn't spend much time discussing one of its most ambitious initiatives: Project Loon, Google's effort to beam broadband Internet access down to remote or rural regions of the globe from a network of stratosphere-roaming balloons. Loon was started inside the company's Google X lab in 2011 and has accompanied other high-flying efforts, such as one to fly solar-powered drones transmitting wireless Internet signals. But Loon has come a long way in the past two years, and Mike Cassidy, a vice president at Google and the project's leader, gave Bloomberg an update. He highlights two recent advancements that could help Project Loon finally reach commercial deployment as soon as 2016.

First, Cassidy says Google has partially automated the balloon launching process with 50-foot-tall, cube-shaped units it calls the Autolauncher. The second advancement within Project Loon is an even bigger deal. Cassidy says they have devised a way to pass high-frequency Internet signals from balloon to balloon in midair, which allows individual balloons to roam 400 kilometers to 800 kilometers away from a ground station. By the end of the year, Cassidy hopes to be able to provide a few days of continuous service in its tests.

Public Knowledge's Kimmelman: Charter/TWC Lacks Same Problems of Comcast/TWC

Gene Kimmelman, president of Public Knowledge, says he does not think the proposed Charter/Time Warner Cable merger has "the same problems" that the Comcast/Time Warner Cable proposed merger had in terms of competition issues, but says it has some that will need inspecting. A former antitrust official with Justice in the Obama Administration, Kimmelman emphasized that the merger would almost double the size of Time Warner Cable, and said for that reason it was going to get a "very serious review" by law enforcement officials. "They are a pure transmission play, so it will be a very different transaction under review." But he said a big difference between this deal and Comcast/TWC was that it was a combination of companies that don't own content (outside of a few regional sports nets). Kimmelman said the big question in the deal is the impact on cable bills and whether the result of the deal will be better speeds and new services. Charter is arguing it will do just that.

The Sun Must Set on Mass Surveillance

[Commentary] The Senate's pro-surveillance wing is scrambling to advance new legislation to preserve the National Security Agency's unchecked ability to spy on all of us. And they're in a rush. Authorization for the federal government's bulk collection of phone records is set to expire on June 1. Their efforts were scuttled on May 22 -- moments before members of Congress returned to their home states for the week-long Memorial Day recess -- as Senate Majority Leader Mitch McConnell (R-KY) failed to muster the votes needed to continue the surveillance program under Section 215 of the Patriot Act. But surveillance senators aren't giving up.Senate Intelligence Committee Chairman Richard Burr (R-NC) and Ranking Member Dianne Feinstein (D-CA) delivered legislative proposals to extend bulk collection beyond June 1. In addition, the proposals further weaken recent efforts to make intelligence agencies more accountable to oversight.

Government intelligence agencies hold up Section 215 as one of a litany of laws that supposedly justify their ongoing abuse of our rights. But the language of the national security laws in question hasn't withstood scrutiny in the court of law or public opinion. And the public must speak out now to close this chapter on mass surveillance and restore everyone's rights to connect and communicate in private.

[Timothy Karr is Senior Director of Strategy at Free Press]